Bendigo and Adelaide Bank Announces New CPS4 Issue

Bendigo and Adelaide Bank (“BEN”) today announced an offer of new Converting Preference Shares 4 (“CPS4”), which are expected to be quoted on the Australian Securities Exchange (“ASX”) and trade under the ASX code “BENPG”.

CPS4 Offer

BEN intends to raise approximately $300 million through the offer of CPS4, with the ability toraise more or less (the “Offer”). CPS4 are being issued to support BEN’s balance sheet growth and to ensure BEN continues to have strong regulatory capital levels, with the proceeds available to be used to fund the redemption of BEN’s Convertible Preference Shares (ASX ticker code: BENPD) (“CPS”) and for general corporate purposes.

CPS4 are fully paid, non-cumulative, perpetual, converting preference shares and will qualify as Additional Tier 1 Capital under APRA’s Basel III capital adequacy framework.

CPS4 will provide investors with floating rate, quarterly, discretionary, non-cumulative dividends that are expected to be fully franked. The Margin is expected to be in the range of 3.75 per cent to 3.95 per cent, and will be set by way of Bookbuild to be conducted on or around 23 October 2017. Based on the expected Margin and assuming a 90 day Bank Bill Rate of 1.705 per cent, the Dividend Rate on CPS4 would be equivalent to an unfranked Dividend Rate of between 5.455 per cent and 5.655 per cent per annum which is equivalent to a fully franked cash Dividend Rate of between 3.819 per cent and 3.959 per cent.

If certain conditions are met (including APRA’s prior written approval), BEN may elect to redeem, resell or convert CPS4 into Ordinary Shares of BEN on 13 June 2024. Otherwise, CPS4will mandatorily convert into Ordinary Shares of BEN on 15 June 2026 (subject to certain conditions being satisfied or unless exchanged earlier). CPS4, in accordance with their terms of issue, are subject to automatic conversion into Ordinary Shares of BEN upon the occurrence of a Non-Viability Trigger Event or Capital TriggerEvent.

The Offer comprises:

  • a Reinvestment Offer to Eligible CPS Holders – being registered holders of CPS with a registered address in Australia at 7:00pm (Melbourne time) on 12 October 2017 (see further details below);
  • a Securityholder Offer to Eligible Securityholders – being registered holders of Ordinary Shares, CPS2, CPS3 or Capital Notes with a registered address in Australia at7:00pm (Melbourne time) on 12 October 2017;
  • a Broker Firm Offer to Broker Firm Applicants including Eligible CPS Holders – being Australian resident retail clients of a Syndicate Broker; and
  • an Institutional Offer to Institutional Investors – being certain Institutional Investors invited by the Joint Lead Managers to participate in the Offer.

The Reinvestment Offer and Securityholder Offer are expected to close at 5:00pm (Melbourne time) on 1 December 2017.

The Broker Firm Offer for applications in respect of Reinvested CPS is also expected to close at 5:00pm (Melbourne time) on 1 December 2017 and the Broker Firm Offer for all other applications excluding those in respect of Reinvested CPS is expected to close at 10:00am (Melbourne time) on 12 December 2017.

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